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Opening third Dutch offshore wind farm and Dutch state participations

Congratulations to Eneco and Mitsubishi! Today marks the opening of the third Dutch offshore wind farm, called "Luchterduinen" and situated 23 kilometers off the Dutch coast. The project is sponsored by Eneco and Mitsubishi. Its 43 turbines hold a total capacity of 129 MW, capable of supplying clean power to roughly 150,000 households. The project has been fully operational since July and has contracted part of its production out to the Dutch Railways. Dutch Railways will boost consumption to 20% of Luchterduinen's capacity in 2018.

Together with Offshore Windpark Egmond aan Zee (108 MW) and the Prinses Amalia (120 MW), the Luchterduinen contributes to meeting the Dutch renewable energy targets. The Gemini project will add another 600 MW when commissioned. Further expansion of the Dutch offshore wind power generation capacity will follow when the Borssele I and II tender opens in December.

State participation in the energy sector

Recently, the House of Representatives debated the Dutch State participations. In the report of this meeting, the Dutch Finance Minister indicates that he wants more shareholder activism with regard to his State participations, including those in the energy sector. These intentions were also voiced in his earlier "Participations Paper". Briefly, they include the selection of a number of large companies that remain in State hands (which selection is revisited every seven years), as well as a closer monitoring of strategic decisions and large investments, an individual target return per company, and greater scrutiny of appointments and remuneration packages.

1.1. TenneT

In light of the German Energiewende and planned Dutch renewable investments, several members of the House expressed their concern that a capital injection by the Dutch State in TenneT would be required to enable TenneT to fund capital expenditures in the German and the Dutch grid. Finance Minister Dijsselbloem responded to these concerns by reference to the legal requirement that Dutch grid operators are 100% publicly held. Expansions of the Dutch high-voltage grid, operated by TenneT, can to a certain extent be funded through the pension funds, but not completely. A proper gearing will also require an equity increase by the Dutch State. The Minister pointed out that in Germany TenneT is organized as a separate legal organization, that funds its own capital requirements with private parties and not through a capital injection by the Dutch State. The Minister also indicated that the articles of association of TenneT are currently in the process of being amended (Gasunie's articles of association were amended a considerable amount of time ago).

1.2. URENCO

Several members of the House raised questions on a possible sale of the Dutch State's one-third stake in URENCO. Since the other shareholders expressed their willingness to sell their shares, the Dutch Government feels compelled to evaluate various scenarios, from remaining a public minority shareholder to selling its stake. In either event, the Dutch Government will need to remain in a position to safeguard the public interests. It is currently preparing a legislative proposal aimed at reinforcing its ability to do so, but awaits final coordination with Germany before it can publish the draft bill to the House. The Dutch Government will consider to sell its shares in URENCO, but views that as a decision that is to remain distinct from the outcome of the debate on the bill.